Financial Independence I remember when I first started reading this sub 3-4 years ago, my target FI number was a $500k portfolio. |
- I remember when I first started reading this sub 3-4 years ago, my target FI number was a $500k portfolio.
- Wall Street Journal: 'How to Quit Your Job' talk, r/financialindependence shoutout!
- Keep grinding early or not? Burned out.
- Depression due to being on AutoPilot
- Daily FI discussion thread - May 30, 2018
- Pros and cons of paying off house early
- Weekly Self-Promotion Thread - May 30, 2018
- Two highly-rated books by Randy Thurman free on Amazon Kindle today
- How would transitioning to a lower pay job later in life impact our FI/RE goals?
- Buying stock in life's essential commodities these days?
- Backdoor Roth IRA
- Help! Chinese dad insists on spending all his retirement saving to buy property in a super hot market so he can help me raise kid, while I have no idea where I'd be in 10 years
- Great article on risk by Taleb
- 3% WR and adjustment to 4% WR
- If you could share one thing with your significant other to get them on board with the pursuit of FI..
- Mid life crisis/burnout -- upending FI?
- If you had 400k, how would you invest it?
- [Philosophy] This subreddit has a "keeping-up-with-the-Joneses" mentality towards retirement dates, figures, and numbers. Your goal should be a focus on financial independence as the #1 priority. Defining retirement is vague and culturally restrictive. You will be "working" the rest of your life.
- 55+ yrs old couple - 401k and IRA being maximized yearly, while jobs last - $100k available towards investment
- Affiliating with the Wrong Sort
- My “Office Space” life due to FI
| Posted: 30 May 2018 04:30 AM PDT I recall thinking that if Mr Money Mustache, a guy with a family, could retire with a $600k portfolio and a paid off $200k house, a $500k portfolio for a single guy would be no problem. Many people on this sub at the time had similar target numbers in the upper 6 digit range. High numbers, but nothing too crazy. Now, after reading this sub for 3-4 years, my target number is more like $1M in investments. But I'm starting to wonder why. My lifestyle hasn't changed much. I'm still single and don't plan to get married or have a family. My only goals are to live a modest, quiet life, and for work to be an option rather than a necessity. Do I really need millions of dollars to do that? These days, I see people here with $1.5 million portfolios saying that they plan to work high stress jobs for another 10 years. Or people with $2 or $3 million who are targeting $5 million, then $10 million, etc. I feel like a lot of the target numbers I've seen here keep getting higher and higher with no end in sight. I get that you need to plan for high expenses in life, like health insurance, aging parents, or if you plan to have kids or live in a high cost area. I feel like this sub changed a lot in the last few years. I'm just a modest earner, with a relatively low FI target number. But maybe I'm wrong and I should be re-evaluating my goals. Can FI even be done on $500k-$1M anymore? Thoughts? [link] [comments]  |
| Wall Street Journal: 'How to Quit Your Job' talk, r/financialindependence shoutout! Posted: 30 May 2018 01:37 PM PDT Found (the speaker) Khe Hy's video/Blog post link of his talk at a recent WSJ conference about quitting your job:
The speaker came from an elite finance job, but looks like a few of his philosophies were inspired by fire. He goes a lot deeper though into things like net worth vs self worth, do you own your stuff (or does it own you), what does wealth mean, what does it mean to retire, etc. Thought it might be interesting and relevant to FIRE peeps. He calls out the FI mission in the sidebar around ~5:00! lol [link] [comments]  |
| Keep grinding early or not? Burned out. Posted: 30 May 2018 08:52 AM PDT Hi FI, long-time lurker here. I'm a burned-out lawyer at a high-powered litigation firm. My wife and I finally paid off our 200k of debt this year, and now have 80k in assets, half in a 401k and half in cash savings as an emergency fund. If I stick it out through the end of the year, we should be up to about 200k in assets, since a substantial amount of my total comp is an end of year bonus. We save about 66% of our net. I make about 400k a year. My firm pays above-market for high billers, like me. It also gives me stellar experience, including two cases I run alone and involvement in other high profile cases frequently in the news. My billable hours tend to be around 2500 a year. Billable hours tend to be about 80% of total hours worked. My wife stays home with our child, and makes about 12k a year in mostly passive income from a side hustle. I have a very strong reputation at the firm based on my intellect, personality, and hard work. But in the last two months, I finally burned out. I didn't realize that was possible for me. I stopped caring about anything, and frequently had passive suicidal thoughts. On a scale of 1 - 10, i'm frequently a 1.5. I've since scaled back and started working much less, maybe a 2000 hour rate per year. The scaling back is helping, but there is still a lot of stress associated with running cases alone and being expected to make all decisions. The jury is still out on whether the firm will still be enthused about me if I continue to give them good work, but less of it. On the one hand, it is strange to go from a very joyful person to a deeply depressed, borderline suicidal person. It is obviously hard on my family too, although my wife has been wonderfully supportive. She recognizes this as a rough season, and does her best to help take things off my plate. Part of this grind comes because law is bimodal; you either make big money or you are paid much, much less. I am making a lot of money pretty early on, which I know compounds. I could try to gun for another three years and potentially make partner. I could also stay here for a bit, then transition into another career (business or politics) while using this as a jumping off point. I could transition into government making less than 1/3 what I make now, but keeping career options open long-term. I could try to go in-house for a bit less than 1/2 what I make now, but that substantially narrows options long-term. I'm not sure if I should just suck it up and keep grinding. I know I am blessed to have this job and income capacity this early. If I stick it out for a couple years, I'll be financially independent. I'm just not sure I can survive that long. This comes down to a question about fundamental FI approaches. Is it worth the brutal grind for another couple years to get set up to FI quickly, or am I going at this too hard? Did any of you do a similar hardcore early grind and do you think it was the right approach? Edit: Just wanted to thank everyone for the thoughtful replies. It is helpful to get comments concerning what is and is not normal in even an intense grind. I appreciate everyone's insight. [link] [comments]  |
| Depression due to being on AutoPilot Posted: 30 May 2018 11:57 AM PDT I'm running into a weird issue. The wife and I have been on the FI path for a while now. It's been a lot of effort and focus for a few years, and now it seems like the problems of our life are, for lack of a better word, solved. There's no issues left for me to address, problems to answer, or spreadsheets to set-up. "Life" is a solved equation and now I just need to keep inputting time until the results come back as I've calculated. I keep checking in to make sure everything is on track, but that's it – my tinkering is done. Honestly, I've gotten most of my life on autopilot now – savings and investments set-up to auto-invest, financial goals consistently met on or ahead of schedule, bills and retirement savings are taken out without me doing anything. Family is doing well, relationship with wife is strong. Work is well acceptable. It sounds weird, but there is little to no friction in my life, I've spent the last few years eliminating all of it that I can (left a shitty job, stopped trying to keep in touch with toxic 'friends', paid down debt, increased eFund, etc). I've done my best to remove useless crap from my life and have replaced it with more time for my family and hobbies. However, there isn't as much enjoyment in these things anymore. Not from a "need to keep up with the Jones, this needs to be shiny" perspective, but more a "well I always get to read now, why is this supposed to be special or relaxing?" I feel as if I have some form of mild depression that is starting to set in; an ever growing feeling of 'ehh' and muted gray tones that are coming to define me of late. I've been trying different things the last few weeks, and nothing is keeping my interest. I've tried to rekindle some of my old hobbies that I dropped due to no time (realized it's more I didn't like them so never wanted to put time into them). Put more focus on hobbies I find fun, and while I still get a 'high' from doing them, it isn't lasting. Tried completely different things from my norm and nothing has stuck. Reread old books, replayed old games, read new books, played new games, nothing once they were finished. I'm not sure what the real problem is, but there is something missing. I'm doing well in life, have it set up to continue to do well regardless of my actions - and it feels like I'm an empty shell just being pushed along the road. I can't take joy in normal milestones as I knew it was coming months ago, so why does it really matter. When I was younger being able to put an extra $100 towards debt was a great feeling. Last week the wife got a bonus and we put an extra $5k towards debt and I was more annoyed I needed to log in to pay it rather than being excited to be that much closer to being finished with it. I know that's a shitty mindset, but that's where I am. The main problem is I'm only getting more depressed at the fact that I am depressed, which is feeding into the spiral. I've spent more time this week at work just staring at my computer. Not wasting time on reddit or some other website. Not doing work, not even watching random youtube videos. Just sitting there staring at the screen for literally hours, barely making clicking sounds to appear to be working. Not even thinking of stuff, just mindlessly existing. And before I get the "build the life you want then save for it" – I already do that. So far this year the wife and I have had 2 different mini-getaways, a couple of weekends visiting friends and family, have 3 more long weekends planned for the summer, have passes to the science center and take the kids regularly, monthly date nights, take the kids to the park or just playing outside, etc. In all aspects, I lead a great life. I always enjoy the activities in the moment, but the problem is once the moment passes, I get right back into this gray feeling. Playing with my kids is great, but once they go to bed, I'm stuck in a gray box for the rest of the night. I guess one of my main issues right now is trying to classify the problem so I can start trying to address it. It's not burnout, it isn't stress. It almost feels like since it's "easy" there isn't a point to focus on it, and also knowing that the finish line is years away and there isn't much else I'm willing to do to get there sooner. Anyone else start to feel/become depressed once you had the road set out before you, knowing that you are now one of the minor pieces to the puzzle of your life? [link] [comments]  |
| Daily FI discussion thread - May 30, 2018 Posted: 30 May 2018 04:08 AM PDT Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments]  |
| Pros and cons of paying off house early Posted: 30 May 2018 06:12 AM PDT I'd like to hear your thoughts on the pros and cons of paying off a home early. First, I understand that my mortgage interest is a lower rate than what the market returns on average. Thus I follow the fundamental truth that you are probably mathematically better off if you invested your money instead of dumping it on your mortgage. I feel that there might be more to the story philosophically and from a risk perspective, or at least emotionally. My wife and I live in a LCOL area and make about $180k. We max out our 401ks and have about $150k in there. We don't really have much else for savings or investments beyond an emergency fund as we bought a $300k home last year. We are both 28 years old. We bought the house with a 15 year mortgage so our payments are around $2k. I started a side business two years ago that I have been fortunate to make some reasonable income with (~$20k-$30k ish). My wife and I excitedly realized that we could use this extra income to dump on the mortgage. We realized we could basically pay off the house in 4 years without sacrificing anything lifestyle-wise. So we have been making $4k and $5k payments and everything is going swimmingly. I am completely dedicated to paying off the house, quitting my day job at about age 32, and using the decreased monthly expenses as flexibility that allows me to start up my own bootstrapped business. I have entrepreneurial experience and know I can be successful. I suspect I can even make a reasonable income working for myself less than full time. At that time I think our portfolio would be about $300k home, $300k in 401k, and perhaps $50k in individual investment accounts. We would strive to make at least $50k as a family moving forward. I guess I just want to hear what you guys think of my plan. Is owning a home outright even that great of a place to have your money? It seems like I'd have to borrow against it or sell it if I ever needed cash. The emotional benefit of having no mortgage would make it so much easier to start my own business, and the market seems much riskier over a 5 year timeframe than a 30 year timeframe. I can always go back to work if my business fails I guess, I am a civil engineer with a masters degree and it's pretty easy to find work for $80k or so. I am thinking of this lifestyle where my side hustle pays expenses and helps me start a small one man consulting firm, and I work a sporadic schedule with lots of time to go camping and hiking. It makes my heart swoon. Will I regret not having big money in that 401k? Will owning the house outright just leave me cash poor? Thanks for reading. [link] [comments]  |
| Weekly Self-Promotion Thread - May 30, 2018 Posted: 30 May 2018 04:08 AM PDT Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  |
| Two highly-rated books by Randy Thurman free on Amazon Kindle today Posted: 29 May 2018 06:03 PM PDT I found these books are available on Amazon Kindle for free today. I haven't read them yet myself but they've got good reviews and look like they'll be helpful for FIRE chasers: The All-Weather Retirement Portfolio: Your post-retirement investment guide to a worry-free income for life (4.5 stars from 94 reviews on Amazon, 4.39 from 62 reviews on Goodreads) More than a Millionaire: Your Path to Wealth, Happiness, and a Purposeful Life (4.7 stars from 38 reviews on Amazon, 4.17 from 6 reviews on Goodreads) If you don't have a Kindle you can use the Android or Apple apps, download the Kindle reader for PC or use the Kindle Cloud Reader online. [link] [comments]  |
| How would transitioning to a lower pay job later in life impact our FI/RE goals? Posted: 30 May 2018 06:47 AM PDT About us: We are 33 and 34, married, no kids, none wanted with $404k in annual salary. Salary is double what it was 5 years ago and we started saving late because law school. We have $220k 401k, 30k roth, and we max 401k and backdoor roth now. We also started contributing $4200 per month to Vanguard index funds, currently $25k in that fund. We bought a condo last year for 500k, put 100k down. Our goal is to retire at 50/51 respectively, travel and then retire abroad. At our current trajectory we hope to have between $3-4 million in 401k/Roth/Vanguard and be able to sell our condo and buy a house in cash (potentially in Portugal). That being said, we don't know if we can deal with high stress jobs for that long. I am trying to figure out how a change to lower stress, lower paying jobs somewhere between age 42-47 and extending retirement would change our finances. [link] [comments]  |
| Buying stock in life's essential commodities these days? Posted: 30 May 2018 03:29 PM PDT Sorry if this has been answered here before. I'm close to putting my first 10k in vtsax but my question is what people who don't go all index fund investing do. I'm interested in buying stocks in life's essential commodities afterwards to some percentage (food, water, shelter, power, insurances, etc.) as a way of hedging those costs when FIRE hits with the mindset that those costs will be higher at the time of FIRE and so on. My thought process behind this is if our essentials do inflate, our money in these stocks could help offset those costs at a later date. And even more specifically, selling these stocks to pay for those needs. Thoughts? [link] [comments]  |
| Posted: 30 May 2018 12:07 PM PDT Forgive me if this has been answered elsewhere - I'm sure it has, but I'm having a bit of trouble understanding other posts on this subject and I just want to double check that I'm doing everything legally. Assume:
If I understand this correctly, because of (1) and (2) the following are true: A) I cannot contribute to a Roth IRA directly. B) I cannot deduct contributions to a Traditional IRA Therefore, when I do my backdoor Roth IRA, I do the following: First I put $5,500 cash into a Traditional IRA brokerage account. Second, I have my broker convert the Traditional IRA account into a Roth IRA account. Here's the part I want to double check: since I cannot deduct my Traditional IRA contributions (i.e. they are being taxed), then I do not need to pay any additional taxes on my conversion of the cash in the Traditional IRA account to cash in the Roth IRA account? Any advice is greatly appreciated! [link] [comments]  |
| Posted: 30 May 2018 12:41 AM PDT About me:
About my Dad:
Mum: Haven't talk to her about this whole plan yet. She likes living in US and willing to help with kids, if any. It's a huge headache talking to him because he lacks of basic investment knowledge in US, can't access Google, and don't have great patience to read long English articles. Tried to reason with him:
I'm not trying to convince him and make him do things my way, but he's just being irrational. I love him but he's driving me nuts. I want to present him as much information as possible and not make decisions based on traditional Chinese investment wisdom. But it's an overwhelming task. I spent a few years reading articles and books about investing and he wants a property in a year. Please help me come up with good arguments to reason with him! On the other hand, if someone can convince me his idea is brilliant, I might even help him out to buy a property. I'm open. [link] [comments]  |
| Great article on risk by Taleb Posted: 30 May 2018 08:57 AM PDT Really interesting article by Nassim Taleb on different ways to think about risk: https://medium.com/incerto/the-logic-of-risk-taking-107bf41029d3 [link] [comments]  |
| Posted: 30 May 2018 11:48 AM PDT I have read a lot of posts how a 3% SWR is too conservative and you will die wealthy rather than enjoying your money. I have been targeting a 3% SWR because we would like to retire at 50 and thus could have more than 30 years in retirement, thus going outside the bounds of the Trinity Study (success rates based on 30 years). Would it make sense to plan for a 3% SWR from 50-60 and then reevaluate up to 4% if things went well? It seems logical to me but I want to know if there is something I am missing. Edit: when I readjust would I readjust based on my previous balance or the new balance I have after 10 years? [link] [comments]  |
| Posted: 30 May 2018 05:44 AM PDT What would it be? What is the single best blog post, podcast episode, book, etc to enlighten a significant other about this pursuit? [link] [comments]  |
| Mid life crisis/burnout -- upending FI? Posted: 30 May 2018 08:51 AM PDT Long story short, I work in government in a very stressful, non-union professional capacity. Work is at best somewhat boring/not rewarding, at worst very stressful to the point of affecting my sleep (vicious cycle). Between modest vested benefits, coupled with some family windfall money, I am well on my way to FIRE if I stay put and grind it out for another decade, even with major childcare expenses, for FIRE in early 50s. But I'm exhausted and burned out, and tempted to rely on progress to date to bail and maybe try something else (not sure), relying in part on windfall money and deviating from the safe and secure path. My entire life I have been responsible, bird-in-hand, a saver. But I'm in my 40s and while staying put is probably best on paper, I feel my life being drained away by the work BS/stress. I know I need to try to find hobbies, but between work, commute and kids, not much gas left in the tank. Thoughts? Jeers? Thanks. [link] [comments]  |
| If you had 400k, how would you invest it? Posted: 30 May 2018 10:56 AM PDT Hello all, My mother passed away early this year and left me around 400k in inheritance. I am on my early 20's and I have no debt. My goal is obviously finding financial independence, or at least getting closer to it, which I imagine is achieved by a combination of lowering my cost of living and getting enough passive income to cover it. For reference, I am currently comfortably living off 20k a year. I know 400k might not be enough for financial independence, but what do you guys recommend as far investments that will get me closer? Rental properties, portafolios? etc. I am open to hearing your ideas :-) Thank you If I am approaching this in a foolish way, please feel free to tell me. I am aware that I am probably a pretty naive person due to my age so I welcome any constructive criticism. Thank you [link] [comments]  |
| Posted: 30 May 2018 10:03 AM PDT This might be a controversial opinion or statement: you will "work" until you die. That's a fact. The most interesting aspect of being human is the ability to think and control their own environment. Ask yourself:
This requires work. Review:
This too requires work. To be informed. To be understanding. Empathetic. Communicative. New ideas. New discoveries. Life is work and work is life, at least evolutionary speaking on how the brain processes things. A successful state of being human is using both your body and brain towards your own environmental actions. Give this some thought: working is not bad because you do it every day with or without pay. And the amount of aware, intelligent, and thoughtful choices means you will need to work even more than the average person for that level of fulfillment. A criticism of this moment is that "well if you are getting paid, you aren't retired." Ignore this! The core philosophy is to become financially independent so that work is an authentic effort towards understanding, improving, and growing as a person whether or not you are getting paid. And assuming your stance on finances, if you get paid for it, even better! If it reduces your costs, even better! You will be working the rest of your life. But the ability to make intelligent, rational choices is the flexibility that financial independence allows to truly grow. [link] [comments]  |
| Posted: 30 May 2018 10:58 AM PDT This is more an FI question, than RE (can't afford the latter), with - as subject attempts to summarize - following request for assistance: 55+ yrs old working couple, with 401k already maximized through jobs' participation, as well as IRA. Decided to rent for the reminder of our working lives (7-max10yrs), due mainly to job maintaining w/possible mobility on short notice need vs. property maintenance, at this age, so just sold our condo and been left with $100k. The 401k + IRA amount to a total of approx $800k, with the IRA holding over $750k. Considering the above given data, and lack of investing expertise on our part, here are some thoughts we had on how to put this $100k cash money to better use than savings (in support of our retirement):
Would appreciate some feedback... [link] [comments]  |
| Affiliating with the Wrong Sort Posted: 29 May 2018 09:35 PM PDT Great article in the guardian on how "influencers" shill products by crafting a persona online. Makes me think about the sudden explosion of blogs touting FIRE principles. These popular blogs show lives changed by FIRE and how easy and achievable FIRE is. Anyone can do it! They believe in this so much, that they take time out of the time they worked so hard to earn, to document their lives and learnings, write recommendations, do podcasts, media interviews, talk to anyone who will listen. They want their message to reach millions. They want followers. To help them, of course! The message is seductive, and soon they find their following. For some of these blogs however, the real prize is affiliate marketing and commissions by sending a few of their naive but enthusiastic followers to real estate seminars, high interest credit cards, refi websites, recommendations about certain travel sites, financial coaching, 1% fee personal capital affiliate links, etc. They are working to get paid at the expense of the sorry (and vulnerable) few who can't tell BS from FI. That they are "helping others" is ambien for the conscience. https://www.theguardian.com/news/2018/apr/19/wolves-of-instagram-jordan-belmont-social-media-traders [link] [comments]  |
| My “Office Space” life due to FI Posted: 30 May 2018 10:32 AM PDT Due to FI I have the ability to call the shots around my career. I spent the morning staining my deck while stopping to take two client calls. Now I'm heading into the office because a big reseller is in town and taking the sales team to a baseball game and dinner. It's a "business casual" office but I'm wearing shorts & t-shirt today. Being FI let's me have a screw-it attitude, and I've been posting the best sales figures of my career. Fiscal year ends next month and I'll be requesting a raise. [link] [comments]  |
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